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State of California in Legal Battle Over Identifying Donors

The CCP doesn’t want California charities to have to reveal the names of donors.Image: Campaignfreedom.org

The Center for Competitive Politics (CCP) has filed an injunction to stop California from enacting state laws that would require them to identify donors who gave more than $5,000 dollars. The State of California requires unredacted Schedule B forms, which would identify such donors, in order to pursue anti-fraud investigations, should they occur. By requiring this information up front, it saves them time when such investigations do occur, as they would otherwise have to wait for warrants and give potentially fraudulent charities or donors time to hide information. This is especially relevant following the recent discovery that four cancer charities in the US defrauded donors of millions of dollars.

The CCP claims that having to declare their donors is a violation of the First Amendment rights of those donors, though the court maintains that there is no significant burden on those donors because of this action.

The issue is part of an ongoing conversation about the transparency and accountability of non-profits and charities, not all of which are created equal. Several other states have similar laws, and several more are considering them, waiting for California to resolve this issue and set a precedent. The CCP is concerned that such attitudes could spread and continue to “violate” free speech, something that they’re very concerned about.

The CCP’s biggest concern seems to be that, if they identify their donors, those donors might not be able to use CCP to dodge paying taxes. Other non-profits that have challenged similar laws include Citizens United, the group that managed to get the federal government to treat corporations as people, and the Americans For Prosperity Foundation, the Koch brothers-backed group trying to dismantle the Affordable Care Act. These groups are specifically political, and tax-deductible donations to them are essentially campaign donations for conservative politicians. That flies in the face of the logic of tax-deductible donations, which are supposed to do more good for society faster than paying taxes would.